System and method for physicals commodity trading

ABSTRACT

A method and system for an electronic commodities trading marketplace along with ancillary tools provide an electronic trading center for world market commodity importers, exporters, and the intermediaries and processors between them. This trading center is offered through its website centered around a 24-hour exchange that provides trading markets for commodities such as coffee, sugar, cocoa and cotton. The scalable system provides aggregated third party services linked to both front and back office operations. These services can include items such as live futures quotes and real-time news, futures brokerage, banking and finance links and resources, and a suite of applications tailored to members&#39; specific risk-management and end-to-end contract execution needs. The system also provides access to shipping related services such as freight brokerage, direct booking for liner transport, load and discharge supervision and laboratory testing.

RELATED APPLICATIONS

This application is a continuation of U.S. patent application Ser. No.09/907,450 filed Jul. 18, 2001 which claims priority of U.S. provisionalapplication Ser. No. 60/219,023 filed Jul. 18, 2000, both of which areincorporated herein by reference in their entirety for all purposes.

FIELD OF THE INVENTION

The present invention relates to trading physicals commodities and moreparticularly to an electronic market place for trading physicalscommodities.

BACKGROUND OF THE INVENTION

The following definitions and descriptions help explain the commoditiestrading industry and some of the misconceptions that exist regarding it.A more complete list of definitions is included as an appendix herein.

Markets:

Cash (physicals): Refers to the physical exchange of commodities, eitherdirectly with importers, exporters, and processors or between twointermediaries. Jane is a cash trader.

Paper: A regulated exchange to trade futures and options contracts.Futures represent a specific quality, quantity, and standard deliveryand performance terms. Options are contracts which offer the right tobuy or sell the underlying futures contract. Paper traders takeownership of the physical product, but will always liquidate theirposition in contract before it expires, thereby avoiding takingpossession of the underlying commodity. Dick is a paper trader.

Key Terms:

FOB (Free on Board): Seller relinquishes title to goods at origin onceit crosses the rail of the loading vessel.

CNF (Cost and Freight): Seller transfers title to the buyer at thedestination port.

CIF (Cost, Insurance & Freight): Seller pays for all shipping costs andcargo insurance.

Liquidity: Volume of bids and offers in both cash and futures markets.Higher liquidity yields more trading opportunity and less riskassociated with completing (or reversing) a position—Critical fortraders without the ability to store and ship the physical commodity.

Transparency: The amount of information readily available to accuratelyreflect current market prices.

Clearing: Intermediary's performance guarantee to buyer and seller. Theintermediary is responsible for all replacement costs if eithercounterpart defaults.

Clearinghouse: Guarantor of customers' performance, daily reconciliationof each futures and options contract traded on behalf of clients, andnet affect on subsequent margin positions (percentage gain or lossversus settlement price required as deposit.

Cash Markets Players:

The trade: International conglomerates who intermediate betweencommodity exporters and importers. The brochure for the trade house Janeworks states that they facilitate the flow of worldwide commodities byassuming and managing distribution risks. It's not that glamorous.

Cash Broker: Matches buyers and sellers of physical commodities. A cashbroker does not take title to the goods and often acts as anover-the-counter futures broker as well. Mostly focuses on the activesecond-hand market between trade houses, who juggle “inventory” aroundthe globe, trying to purchase and deliver the cargo from the leastexpensive source.

Paper Markets Players:

Locals: A clearing member (or its employee) of the futures exchange whoexecutes customer orders (open-outcry market) and usually trade fortheir own account.

Paper traders: Institutions, individuals and hedge fund managers whoseek profits by trading futures with no intention of holding contractsuntil expiration, thereby avoiding the physical receipt or delivery ofthe physical product. Many are on Wall Street, but Dick works inMidtown.

Many people assume that the physicals (“cash”) are to futures markets(“paper”) what stock brokers are to NYSE, yet futures were created tohedge the delivery price of commodities in which they anticipated buyingor selling at a future date (the end of the harvest). Althoughinvestment activity comprises the majority of futures volume today,exchange traded contracts are the root of all world market prices andstill the primary source of price protection for world tradeparticipants. The following scenario help differentiate between the twoand describes a particular situation that can benefit from the presentinvention.

Jane is a cash trader; Dick is a paper trader. Jane buys sugar from thefarmer today at a fixed price. Since she won't receive it until later,she sells futures for the same quantity to guarantee a minimum price.Dick sold futures to Jane and others since he thinks prices are goingdown.

Commodity trading is risky—for dick and jane—users of the presentinventive systems and methods. These systems and methods can, but do notnecessarily, provide clearing services as the custom of the trade doesnot require such for cash transactions.

One day, Jane buys a cargo of Brazilian sugar with no particulardestination in mind. She immediately sells futures for price protection(hedging) even though she's feeling lucky and bullish.

Jane is very happy. Only a week after buying the sugar, she sells itwith a big, fat premium. She liquidates her hedge and loses money buyingthe futures back, but still has the big, fat, premium leftover. If shehad been wrong about the market, she would have held the futures untilexpiry and delivered the sugar to a buyer on the exchange. In this worsecase scenario, she limits her losses to the cash premium she paid to theBrazilian mill.

Jane loves her job, especially when she's right. Dick thinks it's asilly waste of time. He couldn't be bothered to charter a vessel, worrywhether the boat would sink or if the customer on the other half of theglobe decides not to pay. Instead, he just takes twice as much of hisbank's money, sits in front of a screen with two phones and his charts,and makes just as much profit as Jane.

In paper trading, the trader must formulate and implement strategies infutures and options markets to compliment hedging and management ofphysical positions. This involves short and long term analysis offundamental, technical, political and economic factors. To perform therisk management and operations responsibilities, position limits,margins, profitability, risk/reward of physicals and futures options,counter party risk, country risk, all must be monitored. While in cashtrading, the trader must tailor short and log term contracts to meetprice risk, payment and scheduling concerns of the counter party withina trade house's profitability objectives. This requires intensive travelto maintain an in-depth knowledge of customers, political and culturalclimates, vertical growth opportunities, and risk management issues.

In the past, on-line or electronic exchanges have been developed forspecific environments. However, these exchanges are limited to theinteraction and involvement between two parties and in may cases havebeen nothing more than matching software to determine the coincidence ofdifferent bids and offers. Until now, such exchanges have not provided acomprehensive marketplace open to multiple types of parties, each havingdifferent needs and purposes for being there, nor have they provided anaggregation of services, software, participants and informationnecessary to change the way trading is performed.

One area in commodities that has seen some experimentation into on-lineexchanges is that of energy. However, in addition to the differencesstated above, energy differs from soft commodities and the agri-marketfor a number of fundamental reasons such as the number, size andinfluence of market participants, the rigidity of standard contracts,profit margins, volatility and the measure and practice of riskmanagement.

SUMMARY OF THE INVENTION

The present inventive system and methods provides a real-time electronicmarketplace for physical soft commodities, such as coffee, sugar,cotton, cocoa, rice, etc. Unlike other online trading commodity siteswhich emulate current offline business practices, the present inventioncapitalizes on web-enabled technology to provide end-to-end marketplayers with tools to increase profitability and operating efficiencies.to accomplish this, the system facilitates and streamlines the hedgingand trade execution process—thereby increasing liquidity in thesecommodity markets, attracting new market players, and creating newopportunities for all participants. The present invention is not limitedthe specific global, tight-knot trading communities previouslymentioned, but is expandable both horizontally into new markets andvertically into ancillary product offerings such.

Physical soft commodity trading practices have evolved little sinceWorld War II, mostly affected by telecommunication advancements andglobal trend towards privatization. However, by utilizing the Internet'sunique ability to break down the barriers of access to information,transparency, geography and time the present systems and methods canminimize the current inefficiencies in commodities trading. Bystreamlining front-to back-office, operating costs are significantly cutall players in the market. For example, for many producers and end-usersin a high-margin niche market such as sugar, the present systems andmethods provide, for the first time, an opportunity to bypass middlemenand receive real-time market information. Moreover, by aggregating themarketplaces and ancillary services, the system offers end-to-endtransactions at prices substantially lower than present rates.

In one embodiment, the present inventive system is located at a web sitethat provides a 24-hour marketplace for physical soft commoditiessupported by a staff of seasoned traders. The present system can butdoes not necessarily, provide clearing services, as current marketcustoms do not require physical brokers to do so. The system obtains twomain sources of revenue: subscription fees for marketplace participantsand commissions earned on trades facilitated by bigdogtrader.com.

In a preferred embodiment, the present system employs web site withappropriate design to allow the trading dynamics to be similar topresent electronic marketplaces for chemicals and other commodities, yetincorporates additional features that optimize the transparency,anonymity, and liquidity offered by electronic marketplaces. Forexample, the system permits real-time posting of counterproposalsviewable by all market players, thus eliminating closed negotiations andallowing any other eligible member to execute the original order or itscounterproposal. Further, the system cultivates twenty-four houractivity by incorporating intelligent default technology to enhanceautomatic trade execution. These user-friendly parameters will allowcustomers' to define their flexibility to accept counter-proposals withdifferent prices, quality, and/or delivery period, etc. Finally, a suiteof software applications are tailored for all types of users rangingfrom exporter and processor pricing and scheduling tools, to anArbitrage Watchdog™ that notifies traders of real-time options or spreadopportunities based on pre-defined goals. On operation, many of theseapplications cull real-time positions in both futures and physicalsstored on the system.

As described more fully below, the present inventive systems and methodsprovide at least the following features:

A twenty-four hour commodity marketplace providing physical trading andessential trading tools: live quote and data feeds, futures brokerage,banking services, and other features for end-to-end trading such asfinancing and freight.

An industry-wide approach toward development that appeals to all typesof market participants rather than today's largest players. Competitivepricing, open access for known and established participants and auser-friendly interface to attract direct business from source and sinkcustomers.

Capitalize on the technological advantages of electronic trading toenhance market efficiency and increase transparency.

Market open to all players who meet credit standards.

Anonymous interaction.

Open and posted negotiations, hidden validity of orders to promotehigher trade turnover.

On-line services compound customers' operating efficiency givenincreased transparency of online marketplaces: facilitate, expedite, andincrease financing alternatives for all players, either on or off-bookthrough the company's banking alliance or structured finance (capitalmarkets) alliance. Similar alliances and opportunities are provide withrespect to ocean freight.

User-friendly technology to allow customers to define their flexibilityof market orders and encourage around-the-clock, fully automated trading(compared with most online sites today which still require manual/oralinteraction to confirm a trade.) For example, the system allows ordersthat offer a specific delivery period and price, yet accept a bid with awider delivery period if price is at least a certain level.

Aggregated ancillary services allowing members to streamlinefront-to-back-office procedures with unparalleled savings opportunities.

Standard trade documentation, procedures and development of industries'XML codes.

Unique ability to provide speculators and capital market/structuredfinance players with real-time fundamental news.

Increased access for all industry participants to increase liquidity offutures markets which in turn propels physical trade volume.

Scalability to expand the system to adapt to almost all physicalcommodity markets, including present “franchise” strategy for regionalmarkets and increasing supplementary services.

Additional objects, advantages, and novel features of the presentinvention will be set forth in the description that follows, and inpart, will become apparent upon examination or may be learned bypractice of the invention. The objects and advantages of the inventionmay be realized and obtained by means of the instrumentalities andcombinations particularly pointed out in the appended claims.

BRIEF DESCRIPTION OF THE DRAWINGS

The present invention is illustrated by way of example, and not by wayof limitation, in the figures of the accompanying drawings and in whichlike reference numerals refer to similar elements and in which:

FIG. 1 illustrates an exemplary hardware environment on which thepresent system can be implemented.

FIG. 2 illustrates an exemplary environment for the system.

FIG. 3 illustrates a schematic view of exemplary software componentsused to construct an embodiment of the present invention.

FIGS. 4A-4K illustrate a series of screen shots depicting a exemplarytrade execution.

FIG. 5 illustrates a Forms Wizard in accordance with an embodiment ofthe present invention.

FIGS. 6A and 6B illustrate a Profit and Loss (PNL) Wizard in accordancewith an embodiment of the present invention.

FIGS. 7A, 7B and 7C illustrate an AutoTrade Wizard in accordance with anembodiment of the present invention.

FIG. 8 illustrates an Arbitrage Watchdog in accordance with anembodiment of the present invention.

FIG. 9 illustrates an

FIG. 10 illustrates an

FIG. 11 illustrates a Calendar in accordance with an embodiment of thepresent invention.

DESCRIPTION OF THE PREFERRED EMBODIMENT

A method and system for an electronic commodities trading marketplacealong with ancillary tools are described herein. In the followingdescription, for purposes of explanation, numerous specific details areset forth in order to provide a thorough understanding of the presentinvention. It will be apparent, however, to one of ordinary skill in theart that the present invention may be practiced without these specificdetails. In other instances, well-known structures and devices are shownin block diagram form in order to avoid unnecessarily obscuring thepresent invention.

The present systems and methods provide an electronic trading center forworld market commodity importers, exporters, and the intermediaries andprocessors between them. This trading center is offered through itswebsite centered around a 24-hour exchange that provides trading marketsfor commodities such as coffee, sugar, cocoa and cotton. The scalablesystem provides aggregated third party services linked to both front andback office operations. These services can include items such as livefutures quotes and real-time news, futures brokerage, banking andfinance links and resources, and a suite of applications tailored tomembers' specific risk-management and end-to-end contract executionneeds. The system also provides access to shipping related services suchas freight brokerage, direct booking for liner transport, load anddischarge supervision and laboratory testing.

One alternative implementation includes providing the inventive systemsand methods in an Application Service Provider (ASP) model to allowstand-alone entities to establish specific trading markets.

Hardware Overview

FIG. 1 is a block diagram that illustrates a computer system 100 uponwhich an embodiment of the invention may be implemented. Computer system100 includes a bus 102 or other communication mechanism forcommunicating information, and a processor 104 coupled with bus 102 forprocessing information. Computer system 100 also includes a main memory106, such as a random access memory (RAM) or other dynamic storagedevice, coupled to bus 102 for storing information and instructions tobe executed by processor 104. Main memory 106 also may be used forstoring temporary variables or other intermediate information duringexecution of instructions to be executed by processor 104. Computersystem 100 further includes a read only memory (ROM) 108 or other staticstorage device coupled to bus 102 for storing static information andinstructions for processor 104. A storage device 110, such as a magneticdisk or optical disk, is provided and coupled to bus 102 for storinginformation and instructions.

Computer system 100 may be coupled via bus 102 to a display 112, such asa cathode ray tube (CRT), for displaying information to a computer user.An input device 114, including alphanumeric and other keys, is coupledto bus 102 for communicating information and command selections toprocessor 104. Another type of user input device is cursor control 116,such as a mouse, a trackball, or cursor direction keys for communicatingdirection information and command selections to processor 104 and forcontrolling cursor movement on display 112. This input device typicallyhas two degrees of freedom in two axes, a first axis (e.g., x) and asecond axis (e.g., y), that allows the device to specify positions in aplane.

The invention is related to the use of computer system 100 for thepresent inventive system. According to one embodiment of the invention,the system is provided by computer system 100 in response to processor104 executing one or more sequences of one or more instructionscontained in main memory 106. Such instructions may be read into mainmemory 106 from another computer-readable medium, such as storage device110. Execution of the sequences of instructions contained in main memory106 causes processor 104 to perform the process steps described herein.One or more processors in a multi-processing arrangement may also beemployed to execute the sequences of instructions contained in mainmemory 106. In alternative embodiments, hard-wired circuitry may be usedin place of or in combination with software instructions to implementthe invention. Thus, embodiments of the invention are not limited to anyspecific combination of hardware circuitry and software.

The term “computer-readable medium” as used herein refers to any mediumthat participates in providing instructions to processor 104 forexecution. Such a medium may take many forms, including but not limitedto, non-volatile media, volatile media, and transmission media.Non-volatile media include, for example, optical or magnetic disks, suchas storage device 110. Volatile media include dynamic memory, such asmain memory 106. Transmission media include coaxial cables, copper wireand fiber optics, including the wires that comprise bus 102.Transmission media can also take the form of acoustic or light waves,such as those generated during radio frequency (RF) and infrared (IR)data communications. Common forms of computer-readable media include,for example, a floppy disk, a flexible disk, hard disk, magnetic tape,any other magnetic medium, a CD-ROM, DVD, any other optical medium,punch cards, paper tape, any other physical medium with patterns ofholes, a RAM, a PROM, and EPROM, a FLASH-EPROM, any other memory chip orcartridge, a carrier wave as described hereinafter, or any other mediumfrom which a computer can read.

Various forms of computer readable media may be involved in carrying oneor more sequences of one or more instructions to processor 104 forexecution. For example, the instructions may initially be borne on amagnetic disk of a remote computer. The remote computer can load theinstructions into its dynamic memory and send the instructions over atelephone line using a modem. A modem local to computer system 100 canreceive the data on the telephone line and use an infrared transmitterto convert the data to an infrared signal. An infrared detector coupledto bus 102 can receive the data carried in the infrared signal and placethe data on bus 102. Bus 102 carries the data to main memory 106, fromwhich processor 104 retrieves and executes the instructions. Theinstructions received by main memory 106 may optionally be stored onstorage device 110 either before or after execution by processor 104.

Computer system 100 also includes a communication interface 118 coupledto bus 102. Communication interface 118 provides a two-way datacommunication coupling to a network link 120 that is connected to alocal network 122. For example, communication interface 118 may be anintegrated services digital network (ISDN) card or a modem to provide adata communication connection to a corresponding type of telephone line.As another example, communication interface 118 may be a local areanetwork (LAN) card to provide a data communication connection to acompatible LAN. Wireless links may also be implemented. In any suchimplementation, communication interface 118 sends and receiveselectrical, electromagnetic or optical signals that carry digital datastreams representing various types of information.

Network link 120 typically provides data communication through one ormore networks to other data devices. For example, network link 120 mayprovide a connection through local network 122 to a host computer 124 orto data equipment operated by an Internet Service Provider (ISP) 126.ISP 126 in turn provides data communication services through theworldwide packet data communication network, now commonly referred to asthe “Internet” 128. Local network 122 and Internet 128 both useelectrical, electromagnetic or optical signals that carry digital datastreams. The signals through the various networks and the signals onnetwork link 120 and through communication interface 118, which carrythe digital data to and from computer system 100, are exemplary forms ofcarrier waves transporting the information.

Computer system 100 can send messages and receive data, includingprogram code, through the network(s), network link 120, andcommunication interface 118. In the Internet example, a server 130 mighttransmit a requested code for an application program through Internet128, ISP 126, local network 122 and communication interface 118. Inaccordance with the invention, one such downloaded application providesfor the system as described herein. The received code may be executed byprocessor 104 as it is received, and/or stored in storage device 110, orother non-volatile storage for later execution. In this manner, computersystem 100 may obtain application code in the form of a carrier wave.

Philosophy Applied

Aggregating entire commodity markets with the common, integral servicesof all customers creates unrivaled profitability and cost-efficiencyopportunities. Just as important, however, are the features of thesystem's cash trading software, and the parameters (trading rules) towelcome the new technological tools as a long-overdue opportunity toenhance market liquidity. Specific examples include:

Procedures for addressing counter-party risk (most common customerconcern) are ironically similar to today's market practices. Each membersubmits and maintains their selection of acceptable counter-parties fromsystem's master member list. Market orders appear on each trader'sscreen in one of two colors, depending on whether the listing issubmitted by their individual “enabled/credit approved” list.

Hidden validity of market orders, counter proposals, and other members'authorized trading list forces players to make faster decisions, leadingto higher trade turnover. Hidden validity of market orders, counterproposals, and other members' authorized trading list; forces players tomake faster decisions, leading to higher trade turnover

Completely automated transactions: (i.e. if a buyer submits acounter-proposal identical to a valid offer, the transaction between twotrade-enabled players will be executed and documented without the sellermanually submitting his or her acceptance.) To the best of ourknowledge, while other sites provide automatic matching, trades must beconfirmed with a mouse-click or phone call.

Incorporating and promoting technology to foster the development of24-hour trading without physically manning the “graveyard shift”(minimum/maximum prices, change in price proportional tocounter-proposal with different delivery terms, etc.) Per above, evenduring “manual” mode, trades cannot be completed with unauthorizedcounter-parties.

Posting counterproposals in real time; any other eligible member willhave the opportunity to hit the bid or lift the offer (versus others'system of closed negotiations.)

Weekly polls addressing timely issues concerning fundamental issues,such as estimated crop damages from extreme weather, port congestion,etc, with all anonymous responses.

Forums on options strategies, structured finance, improving customer'sefficient use of Internet, etc.

Focus groups to address improving market efficiency, standardization oftrade documentation and contract execution procedures, and developindustries' XML standard codes.

Technology Components

Software components includes a Software Trading engine; Quote vendorsoftware that guarantees reliability of live feed, reducing the amountof data needed to store on the system; and Back-office accountingsoftware, preferably an MS Excel-compatible, real-time accounting systemwhich can cull a market player's online cash and futures positions andupload/download information to synchronize his/her on and off-lineposition. Customers are provided with the ability to calculate theirtotal mark-to-market profits and losses within minutes throughout theday by calculator software tools provided by the system. Conventionally,such calculations often takes at least five staff-hours/day at a largetrade house.

In a preferred embodiment hardware is selected to provide the redundancyneeded to guarantee 99.98 percent reliability. For example, for everyserver required to run the site, a second server can be housed locallyor at a separate location.

To provide security, conventional methods and hardware are selected andimplemented such as encryption of data, firewall systems, and otherprotection measures.

Exemplary Environment

FIG. 2 illustrates a schematic overview of the parties and entities thatcan benefit from embodiments of the present system 200 as detailedherein. These parties can be located worldwide as the web allowscommunications and data exchanges from any location. These partiesinclude sources of news feeds 202, price quote feeds 204, commoditybrokers and traders 206, freight providers 208, futures brokers 210,producers, exporters (and importers) 212, financial service providersand institutions 214, and speculators or paper traders 216.

System Software Components

By aggregating various market information, market participants, and avariety of trading tools, the present inventive system provideseverything needed to conduct end-to-end transactions, by any type ofmarket player, in the physicals marketplace. FIG. 3 depicts an exemplaryorganization of the function elements, and an interface to thesefunctional elements, of the present system.

In a web-based embodiment of the present system, the elements of theinterface would typically be implemented using Java, dynamic HTML orother similar methods for providing active content to traders and othermarket players using a web-browser to access the system. The underlyingsoftware implement each function, would typically include off-the-shelftechnology where available and robust custom programs when needed. Eachof the various links and interface elements provided by the system canbe displayed independently. Typically a user will simultaneously utilizethree or four active display windows that that can be appropriatelysized depending on what particular trading activity the trader is areperforming.

The system can provide a visitor an introductory page 302 or a homepage304. From the homepage 304, a number of links can be made available to avisitor such as links to site contact information 306, new userinformation 310, a bulletin board 314, and a demonstration of the system317. A login function 308 is also included to control access to certainareas and functions of the system as well as to personalize andcustomize a user's visit to the system. By using a login system, accessto many of the system's features can be limited to members. Furthermore,by segregating the members into different levels of membership, accessto certain features and information can be further refined based on asubscriber's membership level.

Once logged-in, a user can take advantage of the electronic exchange andthe trading tools and information described in detail herein. Forexample, the user can choose to enter a physicals marketplace 324 suchas coffee, sugar and rice which is implemented, in part, through the useof a matching (or trading) engine. Within each of these marketplaces,the user is able to view trading activity and place offers and bids.

Links to other parties that support physicals trading are also provided.The user can access links to financial institutions 326 (e.g., Octagon,Case, etc.) that are involved in the trading process. From these screensa user is able to inquire about and receive confirmation of credit andfinancial services offered through these institutions which facilitatesthe trading process without ever leaving the system. The user can alsoaccess links to freight providers 332 which permits the user to workwith freight forwarders without leaving the system. As explained furtherherein, many of these features are used automatically upon theconclusion of an executed trade so that financial, and other, serviceproviders receive notification and information about a completed trade.

Because information about the futures market is paramount to profitabletrading, a link to futures information 322 is provided that allows auser to view data from one or more markets such as Tokyo, Brazil, etc.Links to other, more generic, market information and news sources 328 isalso provided from the system. These links provide access to real-timedata feeds from Reuters, CNN, Analyst Report as well as more static datasuch as industry-related links, and daily or monthly trading summariesgenerated by the system.

Other tools can also be accessed by a user of the system to help withthe trading process. A calendar tool 316 is available that parses realtime data feeds to permit informing a user about upcoming dates andactivities in different market areas. Preferably, the resulting calendarcan be downloaded and imported into other personal scheduling programssuch as Outlook and LotusNotes. Other tools available to a user aretrading tools 330 that include a trading wizard that permits a user todefine rules governing automatic trading, charting tools to visuallydisplay various market data, and weather-related tools.

The system includes a contracts and confirmations area and wizard 318.Using this wizard a user has the ability to select standard contractsand other provisions agreed upon by other traders. Utilizing suchcontracts allows for quicker trade execution and also allows a level ofconfidence and predictability for all traders.

The Park 320 is also available to a user to permit the user access tospecific formal and informal forums of information that may be ofinterest to the user.

An Exemplary Trading Session

During an initial visit to the system, a trader (or other user) providesbusiness-related information, personal preferences, and other data tocustomize future interaction with the system. FIG. 4A depicts anexemplary screen display 400 presented to a user of the present systemafter logging into the system, typically by providing a username andpassword. The system provides standard templates in each market for eachuser type, for example screens that are important for a trade house userare different than those for an importer. This way, all users mayregister, log-on and begin using the system immediately

Some of the information on the display screen 400 is customized by auser's preferences, such as the particular information displayed inwindows 402, 404, 406 and 408. Other information such as the menu bar414 and the link bar 420 are parts of the system. The menu bar and linksbar can, however, vary depending on what type or class of member aparticular user is such that certain links are only available to certainusers. Although all are customized for the system's graphical userinterface (GUI), real-time information presented in windows 410, 414,404, 406, and 426 are provided by an external data vendors such asReuters, FutureSource Bridge or Data BroadCasting corp. The presentsystem subscribes for the maximum amount of information the vendoraggregates to provide enough functionality for the financial trader, whomonitors all financial news and over a dozen futures contracts in fivedifferent markets, as well as for the trade house user who prefers tosee news selected by the keywords “sugar” and “Brazil” (screen 406) anda tick-by-tick chart of the nearby sugar contract, supplemented with thevolume, open interest or other technical indicators (such as in screen404). Screen 426 is a “snapshot” window where users may select a quickquote options for the most recent value of a particular futures oroptions or equity contract, or display a streaming chart of all pricequotes within a particular market. As shown, these windows include dropdown menu boxes that provide a user with a full spectrum offunctionality menu of choices rather than requiring the user to remembervarious abbreviations for different markets. As with all data vendors,the user has a high degree of functionality such as ability to comparedata, right-click a news headline to lead to the full story, multiplecharting features and ability to download and store the information. Inthe exemplary screen 400, window 402 displays the bid and offerinformation relating to World and US Raw Physical Sugar; window 408displays the bid and offer information relating to World White PhysicalSugar. This information is generated from the system's own tradingengine (real-time posting and matching algorithms). The system alsoprovides polls and questionnaires 422 which are developed, presented andanalyzed by the system's offline trade support. This feature, takingfull advantage of the system's anonymity, provides traders with valuablemarket sentiments that affect market pricing and further supports thesystems ability as a source of market information.

Of particular use to traders, is the layout of screens 410, 412, and 414which the system has named “the strip.” Boxes 410 and 414 displayreal-time activity of a traders' two most important futures markets(those that affect physical purchases and sales the most). In thisexample, 410 is the NYBOT raw sugar contract and 414 is the LIFFErefined sugar contract. Again, initially, these are selected by thesystem for each market, but can be altered and saved by each user.Provided by the system, the middle box 412 updates two types ofdifferentials in real-time. 412A automatically calculates thedifferential between each contract's delivery periods 410A, B and C andthe right hand calculating the difference between two separate contractswith similar delivery periods (410A and 414A). Known as spreads andarbitrage respectively, this automatically displays futures and physicaltrading opportunities when activity in either or both markets causesdisparity. The strip is an independent window, set by default to remainopen and overlaid on any other window the user may open (system windowor otherwise). An example of this feature's importance is the ability tomonitor market movement while in the process of submitting a marketorder.

When a user wants to focus on one display screen, for example to conducta trade, that screen can be selected (by a mouse selection orkey-stroke) to fill a large portion of the display screen as depicted inFIG. 4B. The window 402 is shown expanded, in FIG. 4B, to fill most ofthe display screen. This market screen 402 shows information aboutvarious bids and offers that are pending in the market and is thestandard template used for each market, whether sugar, wheat orotherwise. It displays the minimum amount of negotiating points thatmust be addressed before users will agree to the purchase or sale of theunderlying product. Each market's trading screen is sortable, expandableand collapsible by its negotiable fields (405 A-I). While the amount ofnegotiable fields is not expected to change in the long-run, the systemhas taken the initiative to establish groupings and categories withineach field, such as 405F. “BRS”, for example, is the system's code for‘bulk raw sugar.’ As explained later in this document, the system willencourage participants to continually reduce the amount of subgroupingsas it is more conducive to building liquidity and streamlining thetrading process. In this example, the system-on and offline, willencourage participants to express buying and selling interest by thebroad “Bulk raw sugar” instead of the current custom of the trade tospecify “Colombian or Guatemalan bulk raw sugar” The broader and morestandard the terms, the easier it is to trade (and thus build overallmarket liquidity). By way of example only, the orders are segregatedinto categories based on weight. For each order (i.e., row), the tradingvariables are displayed to permit evaluation of the order. For example,in the sugar market, these variables include shipment timing, origin anddestination point, commodity quality, bid and offer particulars,deliverable specifications, and other items. Also, unique to this systemis the ability to combine a full “many-to-many exchange,” as oftenreferred to by off-the-shelf software companies such as Ariba, with a“one-to-many” auction-type feature as shown as “snap tenders” 430 forthis particular market. These snap tenders 430 are different in thatthey are received from importers and exporters who wish to invite public(members only still) or private (selected members although displayedpublicly) offers or bids respectively. This in known in some industriesas an RFP (request for proposals) except they are typically requestedand executed within a matter of hours.

Many market participants are reluctant to trade with unknown partiesand, therefore, have a limited number of parties that they will tradewith. During the initial account set-up, a user is given the opportunityto identify those parties with which it will trade. For a trade tooccur, each party must have identified the other party as an acceptabletrading partner. These preferences are used in displaying the orderinformation in window 402. For example, text color or other visuallydistinctive methods can be used to indicate which orders are possibleand which are not. For example, allowable trades may be presented ingreen while forbidden trades are depicted in red. Column 405K, “lasttrade” is provided by the system, but separately from the trading enginesoftware. This column, expandable by right clicking the cell, cullsrecent bids, offers and trades the search engine identifies within thesystem's database.

Once a trader determines the desirability of making a trade, the TRADE!menu item can be selected to cause dialog window 432 to be displayed. Inthis window, the trader can enter a market order (bid or offer) bycompleting all the radio buttons, text boxes and drop down menus. Thedrop down menu choices and radio buttons are customized based on theparticular commodities market. appropriate for trading that commodity.Again, window 432 displays the minimum amount of issues that need to beaddressed between buyer and seller. The drop-down selections are usuallyselected by the system within each market based on the most common orlikely characteristics that that a trader typically manipulates toconstruct an order having the precise characteristics desired wouldtrade through the system. The exemplary window 432 display options forthe sugar market; an order window for the rice market, for example,would have different countries selected under “delivery point”.

Column 436 presents the opportunity for the user to establishflexibility regarding any or all the negotiating points. These fieldsare set by default to “no/none/zero” so that market orders may besubmitted as swiftly as possible, with only the items in window 432,allows a trader to describe what characteristics about the trade do nothave to be exact matches to still qualify as a matching counterproposal.In the exemplary window 440, the trader has selected acceptablevariances in quantity, shipment time, price, pricing, etc. This abilityto add flexibility of acceptable terms (consequently, providing thealgorithm with a higher match rate of bids and offers) is the beginningof the Autotrade Wizard, an integrated software application designed byand provided by the system and explained later.

One of the characteristics of the order that is selectable by the traderis the “validity” which is likely the only feature that mirrors currentoffline customs of the trade. For example, the shortest validity wouldbe “fill or kill” (shown for maximum of 15 minutes) or “Good UntilCancelled”. This validity information, however, is not disclosed to theother traders in the market. By hiding this information from view, othertraders will be unsure for how long an order will be valid. Thisuncertainty may increase the pressure to negotiate regarding an orderfor fear of losing an opportunity by procrastinating. One other uniquefeature is the ability to enter hidden flexibility within the order suchas displaying a bid at a certain price but accepting to pay a higherprice (as specified to system but not displayed). Again, this featureincreases the potential for to increase volume as the matching algorithmis likely to meet more success.

Button 435 shows the user that the system is functioning fully and theprices displayed on the screen are the most recent. If the user has thetime and desire, he may select “go to Autotrade wizard” which enableshim to establish more flexibility and negotiability of the market order.Alternatively, for the swiftest and simplest process to post a bid oroffer, the user would select “enter order” which prompts a confirmationwindow 440 to be displayed, as depicted in FIG. 4D. This window 440gives the trader the opportunity to review the order before submittingit for trading. Note that a bid number BRS123 is in the first field.This feature allows users to save bids and offers and templates forcommonly traded items and is used with many of the system's riskmanagement software.

Selection boxes 442 allow the user to select whether “to turn on” theflexibility he has described in the Autotrade wizard or negotiate thepoints manually. Selection of ‘Autotrade’ will be dimmed and blocked ifhe has not entered any flexibility in terms. The trader also can selectfrom boxes 444 to identify the current order as a new order, areplacement order, or a temporary substitute order. This prevents theuser from “double-booking” in active markets (overbuying or selling). Byselecting the SUBMIT button, the order is entered into the market fortrading.

FIG. 4E display window 452 that is the same as the window 402 of FIG. 4Bexcept that the new order 454 is now displayed. This window 452 isupdated in real-time once the order 454 enters the market on everyone'sdisplay who is currently viewing that market. Thus, another trader'sscreen 460 as in window 4F having an active display 462 of World and USRaw Sugar will see the new order and can select it for trading. Oncethat order 454 is selected on the screen 462, by a mouse selection, keystroke or other input event, details of that order are displayed inwindow 466, as depicted in FIG. 4G and the trader can execute the orderas it stands, enter negotiations regarding the order, or ignore theorder. Only trade-enabled market orders can be selected to for detailedviewing (those in which user has identified as acceptable tradingpartners); trying to select a forbidden trade will not result in thedisplay of any additional information and is a feature that is intendedto encourage the overall market growth and liquidity by acceptance ofnew and or more trading partners. Note that the time the order wassubmitted is displayed (time ext.), but not the order's validity.

If the trader selects negotiate, then the counter proposal screen 470,as shown in FIG. 4H, is presented to the trader. Preferably, the counterproposal screen displays the original order 474 and its allowablevariances and automatically populates the counter proposal fields 472.Once the trader modifies the counterproposal fields as desired, thecounterproposal can be submitted, with an appropriate confirmationopportunity 478 as depicted in FIG. 4I with the same flexibility andprotection features to freeze, cancel or maintain similar orders of theuser. This counterproposal by default selects ‘Autotrade’ as they willautomatically be considered against the flexibility of the originalmarket order.

Once the counterproposal is submitted to the market, the display window480 on all traders' screens will be updated in real-time to reflect thecounter proposal 482. Thus, all traders who have both parties “tradeenabled”, not just the two trade participants, have access to thedetails regarding the trade Moreover, such access to these detailsallows other traders to step-in and accept or counter-propose to eitherthe original order or the counter proposal. This market pressure resultsin faster trades and quicker negotiation decisions and, therefore,improves market liquidity.

In this example, even if the initial trader had selected manual, thesystem would match the bid and offer since the proposal falls within thevisible and/or hidden terms the original trader selected. Also, with“Autotrade” selected, the submitting of the counterproposal by thesecond trader will be recognized by the matching engine of the presentsystem as a matching order and automatically execute the trade accordingto the terms of the counterproposal. If the first trader had selectedmanual trading, then the matching engine would have caused a querymessage to be sent to the first trader asking for approval beforereverting to terms specified in the Autotrade wizard to automaticallycounter-propose negotiate and potentially trade with thecounter-proposing trader.

As shown in FIG. 4L, once a trade is executed, a confirmation screen 490is provided to both traders with essential details about the trade andthe trade participants. Up until this point, the traders had beentrading anonymously so that their identities did not impact thisparticular trade or have an effect on the other participants in themarket. The rest of the market participants only see that the trade hasoccurred with terms showing in 405B through-I in window 4B.

The contact information is maintained by the system and is required forvarious software applications to function as explained herein in detail.Note that a specific trade number is generated upon confirmation of thetrade. This reference number, or tag, is unique to this trade and willbe associated with every action and/or calculation made throughout thecontract life, beyond shipment and payment and ending only upon finalcontract liquidation. This tag is relevant and will be referred to indescriptions of the system's ancillary software. Also upon thisconfirmation, both trader's designated freight forwarder and accountingsubordinate are sent email notices (outside the system as a means ofincreasing reliability of information flow). This process notifies themthat the position has changed and automatically asks them whether theywish to associate their customized set of preferences or modify them asfurther described in risk-management software section.

Immediately upon completion of a trade, each counterpart is given thetransaction number that the system assigns, for example, sequentially.In illustration 4K (element 490), both parties are issued a tradeconfirmation labeled RST789 (representing “raw sugar trade” in thisinstance, intuitively chosen for ease of conversion to XML coding whenthe industry formally accepts and establishes the electronic definitionsof industry terms.

This label is a unique identifier that remains associated with thetransaction until the two parties have completed the trade's finalliquidation. Any action, alteration, correspondence, etc. that thetrader or his assigned freight forwarder or accountant enacts (assumingpermission to do so) is identified by the same confirmation label.Therefore, although trader 1 and trader 2 have the same file (virtualfile folder) name on their proprietary database, the notes,calculations, correspondence etc. that are attached to it are unique toeach party and confidential from one another. This tagging system,implemented through technology, such as that provided by TIBCO, is themost significant and most visible mechanism in which traders willdramatically increase operating efficiency and reduce transaction costs.Examples are provided within the context of explaining the followingancillary risk-management and trade execution software.

Forms Wizard

FIG. 5 represents the “forms wizard”, a database of each type ofstandard form required or often requested within each industry.Noteworthy is item 500, a live snapshot of the market that enables thetrader's ability to continue monitoring the market while executingtraders. Forms wizard adds value to the user in three ways. Foremost, inbox 502, the seller (per custom of the trade) is able to generate acontract for RST789 by selecting the item “bulk world raws.” A pop-upmenu will ask the trader to input the trade tag and almost immediately,the system customizes the industry's standard raw sugar contract repletewith all specific variables as negotiated by the parties and confirmedby the system. This replaces the antiquated, but current method ofcopying similar contracts in a company's database and manually changinginformation on the buyer and seller's trader, company name and contactinformation, negotiated price, delivery period, delivery point, paymentmethod, etc. Note all raw sugar contracts are already grouped into onestandard category versus a multiple of regional standards (“Brazilianraw sugar terms”, “TSTC terms for sugar originating in Thailand, etc).The system is scalable to build a database of terms associated withitems that presently trade using the broad “other” column. (example:“Colombian terms,” a negotiating point in today's market, would be inthe “other” field and the system would integrate the original exporter'spreferred/required restriction of the sugar's destination). Upon gainingacceptance as the official trade contract (versus “trade confirmation”that is also required today, the service provided in box 502 andsimilarly in boxes 504, 598 and 510 will greatly reduce inefficienciesof the trade documentation process that exist in today's market. Theselection and subsequent form generation process is also able togenerate charter parties, bills of lading (Item 512) as well as standardrequests for payment, issuance of letters of credit and structuredfinancial products (item 514B). Especially upon the acceptance ofelectronic signatures, the customization and feature that indicateswhether the documents have been amended by either party substantiallyreduces the time and expense of a trading group in comparison to today'sprocedures. This application also provides the ability to generatestandard, pre-trade correspondence such as requests for quotes frombanks and boutique financial entities offering structured financialproducts (Item 514 A). The trader, having created or modified an orderticket (BRS123 in preceding example), simply selects the type ofrequest, which (or all) venders to submit to, and the order ticketnumber. Once the vendors return their indicative quotes, the systemattaches it onto BRS123's cost worksheet (see DealPorter), eliminatingthe need to reference additional sources when trader is ready to submita bid or offer. Finally, as discussed in the PNLWatchdog section, sincemost agrimarket's payment authorizations and acceptances are filteredthrough a corporate-level division, the system's common structure forall of these markets becomes further advantageous.

Profit and Loss Wizard

This application replaces information that all members of a tradinggroup presently receive only once daily, after all relevant futuresmarkets publish settlement prices. While the ability to assess one'sposition in real-time at any point during the day is the main benefit,this system a) provides several features to expedite a swifter, morethorough and accurate analyses of trading opportunities and marketmovements as they affect the company's overall risk position and b)replaces a 7-page paper report distributed to each trader, freightforwarder and accountant. Item 600 displays examples of the software'sability to customize the appearance of the report by dollar values,metric tons (quantity), or by equivalent futures contracts (hedges).Though many users (via passwords) will be restricted from certain views,a group's division head may further analyze the data by region(tonnage), quality, by each of the group's traders. Examples of thesoftware's functionality include ability to view what their positionvalue is based on intra-day futures values (i.e., at this moment vs.settlement). If a trader has been restricted to a certain dollar value,he may monitor his running total and have the system notify him whennearing his limit. His manager, on the other hand, has the authority toautomatically buy or sell cash or futures if the futures market or thetrader's position reaches a particular value. All traders may use thesystem to calculate the hypothetical effects a trade would have on thetotal value which is a risk management feature presently unavailable inreal-time. Positions are calculated using standard mark-to-marketprocedures: taking the futures values as shown in 604, the differentialsbetween markets-data automatically calculated by the system (602) andfinally, using the values listed in 608, representing cash values. Sincetraders and accountants have the ability to accept values the systempublishes on its rateboard (based on weighted average of prices andvolumes quoted and traded within the system each day), ability to changeby dollar, point, or percentage increments or manually update only thosevalues that changed since the previous day, calculating the position isvirtually reduced to the amount of time it takes the trader to updatethe fields in box 608. Presently, an internationl tradehouse thataverages over three million tons of annual volume with multiplegeographic and group positions would require a minimum of 4-5 man-hoursper day. Views and details are fully customize-able and can beintegrated with several other applications such as the ArbitrageWatchdog that culls data from the position, data feed and the calendar.In this particular view, the trader has chosen to break-out the positionby quality of sugar, as shown in 610. Note as well that the last threecolumns in both boxes are collapsible.

Depth of Profit and Loss Watchdog

In 610, if a trader clicks on the box containing “12,000” under thecolumn “far east cash” and the row “March” the system opens anotherwindow displaying the detail within that month's position. For example,a trader would see five sales of 12,000 tons to Far East destinationsand six purchases of !2,000 tons, all labeled with the original numberissued on the trade ticket. Clicking on RST789 leads the trader toanother window providing a high level view of the contract's terms(counterpart, price, quality specifications, internal valuation, etc).from here, the user has options to a) view the pricing and hedgingactivity to date, b) launch the transaction's DealPorter or a summary ofit's actual versus estimated profitability running total, c)hypothetically amend specific terms to see its affect on the totalposition and to calculate the value (maximum amount to propose oraccept) to amend the contract accordingly. Box 612 collates bothphysical and futures options and will become of increasing importance tothe trader seeks to take full advantage of technology's ability toincrease the volume of trades and the level of sophistication regardingrisk-management alternatives (the majority of new opportunities lie inoption plays). Cells in 612 represent cumulative values, expandable inthe same manner as 610. To calculate total values, users may use theDeltas and other “Greeks” generated by the system or their own values.This area contains an imbedded calculator designed specifically forvalues of physical commodity options. Item 614 illustrates the systems'futures position by the clearing entity presently holding the contractson the user's behalf. In conjunction with Dealporter, the system'sability to notify traders and clerks of disproportionate balances amongbrokers or number of trading sessions remaining before expiry areparticularly useful to avoid common and costly issues once contractsbegin to become more illiquid in its final days

AutoTrade Wizard

As introduced in the original trade ticket, all features of theAutoTrade Wizard are designed to foster the growth of automatic, 24-hourtrading. Foremost, one of the system's trading rules is that the user iscommitted to accept a counter offer if it meets the published and hiddenparameters. This means that unlike any other electronic commodityexchange, a trade may (and will) be confirmed by the system withouteither party manually clicking a button indicating “I accept” or “Ok totrade, etc.”.

Autotrade wizard builds upon this philosophy by enabling the system togenerate a series of responses to counter-offers on posted orders andthe ability to alter orders based on indirect factors. Ideally, traderswould post their “ideal” bid or offer on the screen, then sharpen to amore realistic (trade-able) order using basic Autotrade flexibility suchas those listed in Item 700 (which can be displayed or hidden). Item 702shows the system's ability to fulfill a partial or complete long-termcontract, such as one a trade house would have with a processor ordistributor. Item 704 displays the responses the trader would make if hereceived a counter offer that varied as he identified (expected).Example: A division head in London wants to buy a cargo of Colombian rawsugar (DP delivery point). He knows it's rare so he establishes likelyscenarios since he will be traveling to New York and missing the day'strading activity. As he anticipated, a counter offer comes back withGuatemalan raw sugar. Trader 1 has identified this as acceptable, butonly if the offer is reduced from his original by 10%. The systemautomatically responds to Trader 2 with the delivery point “Guatemala”and the amended, reduced price. Trader 2 is amenable to the reducedprice if Trader 1 will amend the shipment period (SP) to provide anadditional two weeks at the end of the presently specified term. Trader1 foresaw this possibility as well, and agreed to accept it if the priceis further lowered specifically, for example, to 10.23 cents/pound.Trader 2 sees the acceptance of the new shipment period, the new price,and accepts the terms. The trade is complete, and upon exiting theplane, Trader mobile phone is flashing a message that he has traded thisorder ticket. Although not displayed, the system is able to executefutures orders automatically to hedge the traded business (if desiredand selected). Traders may enter an unlimited amount of variables foreach negotiable field (i.e. five different delivery points, varyingquality, etc) at the same price or amended price. Once all are entered,the trader ranks them in the order of desirability, so that the systemmay accept all the changed fields he identified, but only at the pricethat the system calculates based on a weighted average of the trader'spreferences.

Item 706 shows an example of the functionality available when he is notable to monitor his position from the office. Item 708 shows featuresthat a trader may select to alter an order based on activity in adesignated futures market. For example, if the specified contract tradesabove a certain price, below a certain price, over or under a specifiedvolume, he could have the system remove the order, “freeze” it, alter isper section 708. This section gives the trader the ability toautomatically change an order's based on the trader's The last stepbefore confirming acceptance and his amended bid or ask in. As eachaffect price, the trader negotiating variables the trader is willing toaccept if shows typical system.

Arbitrage Watchdog

Arbitrage watchdog, FIG. 8, combines the functionality and dataprimarily from the position sheet, data feed and calendar function. Insum, this calculator will continually look for opportunities inreal-time that are not easily detectable in fast moving markets, or arenot deemed as priorities by the trader but add value to the process orto customer relations in the long run. For example, complex optionsplays such as butterfly spreads and eventually rainbow options andweather derivatives as are presently in use in energy markets. Users mayselect an option to automatically email an exporter from whom he hasmade a purchase, for example, suggesting that since the market israllying, he may wish to establish the contract's trigger price. Thissoftware could look for options, spread and deferred arbitrageopportunities in the futures market and automatically submit the orderwith a broker. It may also trigger a reminder for the trader to takeadvantage of his contract flexibility and roll a hedge from a nearbyposition to a more deferred one, for example.

Calendar

The system builds a database of all events pertinent to physical andfutures trading for all agricultural markets, as well as include onlinetraining and forums. All data can be color-coded by physical and futuresinformation, then by commodity, then by source. In FIG. 7 for example,users viewing the listing on Friday, June 9^(th) “Wasde” would know bythe color or font that the item is a report that will be issued by agovernment agency having potential to affect prices. A financial traderis likely to select only and all information pertinent to futuresmarkets and would have the system notify his handheld or phone on thedate a specific contract expires. Users may sort, filter save, andsearch by keyword, add personal items, download and integrate withhandheld or desktop device software, and set up triggers and remindersreport would have a color or hue representative of physical marketinformation and a “hue” or unique font to indicate it is a report issuedby a government agency. This software also has a feature that integrateswith Dealporter; as an example the freight forwarder may run theapplication taking the data contained in the Calendar to ensure thatdates of required vessel nominations, deadlines to open letters ofcredit, and/or final settlement dates are not affected by thecounterpart's banking or government holiday.

Dealporter

FIG. 9, DealPorter, is a dynamic, virtual assistant to the trader,accountant and freight forwarder. It is created as early as a pre-tradeindication for the availability and cost of trade finance, politicalrisk insurance and freight calculations (latter taken from The system'srate board, electronic correspondence from the system's selectedvendors, or manually) It is a worksheet that can be saved for use withcalculating the basis in commonly traded bids and offers, it is areminder feature for the freight forwarder to avoid the common andcostly mistakes of missing the deadline to charter freight, nominate thevessel to load port, open the letter of credit, etc. Many trade houseshighest operating losses are typically in this category. DealPorter is asupplement to the PNL Wizard, calculating up to the minute actualprofits and losses verses budgeted at the time of trade, broken down byeach cost component in the calculation. It tracks alldocuments-amendments, counterparts it was re-sold to, bids or offersreceived for it, etc. Another feature is the ability for DealPorter toread cash and freight values from the system's rate boards, add it toeach cargoes specific cost calculations and suggest the most profitableallocation (matching) of purchases in the system with existing sales inthe total position. This is known as book squaring in many tradingarenas.

Export and Import Scheduler. (FIG. 10)

This software is as valuable to importers and exporters as theDealPorter is to high-volume trade house traders. Using an Exporter asthe example, the trader enters the start date of his crop, his grinding(cutting, picking, harvesting) rate, storage capacity, interest rates,overtime costs, cost and time requirement to alter the quality of theoutput and minimum and maximum domestic commitments and/or min/maxexport or specific quality commitments. The system then processes thisdata using the system's physical commodity rate board and thecorresponding value of futures used to price the contract to come upwith the most profitable suggested schedule of sales and exports. Whileit is assumed many have their own spreadsheets to calculate the same,they do not have the ability to calculate the same virtually in realtime, or to run automatically and notify the trader when the systemindicates a change in the schedule. As a distributor's optionally isdoubled (as both importer and exporter, the software is especiallyvaluable. Once domestic and regional trading become available within thesystem, the importer, exporter and processor may become reliant on thisapplication to compute optimal schedules around the clock since it nowgives them the ability to compute all cash values (domestic andexternal) in real time, with accuracy.

While this invention has been described in connection with what ispresently considered to be the most practical and preferred embodiment,it is to be understood that the invention is not limited to thedisclosed embodiment, but on the contrary, is intended to cover variousmodifications and equivalent arrangements included within the spirit andscope of the appended claims. The invention is capable of other anddifferent embodiments and its several details are capable ofmodifications in various obvious respects, all without departing fromthe invention. Accordingly, the drawings and description are to beregarded as illustrative in nature, and not as restrictive.

What is claimed is:
 1. A computer-implemented system for an exchange,comprising: i) an exchange interface configured to display datasubstantially simultaneously to at least a first customer and a secondcustomer; ii) the exchange interface including at least a firstreal-time, dynamic trading window associated with the first customer anda second real-time, dynamic trading window associated with the secondcustomer, wherein each of the first and second real-time, dynamictrading windows are configured to display, for a specific commodity or aspecific financial instrument, at least the following: a) a negotiablequantity of the specific commodity or the specific financial instrument,wherein the negotiable quantity is an amount of the specific commodityor the specific financial instrument that is tradeable on a domestic,regional or international market and wherein the negotiable quantity isnegotiable in amounts that are not limited to a standardized contractsize; b) a negotiable delivery period for the specific commodity or thespecific financial instrument, wherein the negotiable delivery periodspecifies at least the time period at which the specific commodity orthe specific financial instrument is available for pick up or deliveryand wherein the negotiable delivery period is negotiable in amounts thatare not limited to a standardized delivery time period; c) a negotiablequality for the specific commodity or the specific financial instrument;iii) the exchange interface including a system to allow for directnegotiations prior to contract formation between the first and secondcustomers for at least the negotiable quantity, negotiable deliveryperiod and negotiable quality; and iv) a set of program instructionsconfigured to process at least one trade made directly between the firstand second customers through the exchange, the at least one trade beingupdated in at least the first real-time, dynamic trading windowassociated with the first customer and the second real-time, dynamictrading window associated with the second customer.
 2. The system ofclaim 1, wherein the set of program instructions further comprises atleast one instruction that automatically executes the at least one tradebetween the first and second customers without requiring manualintervention by either the first or second customer, wherein theautomatic execution is based at least in part on the following: i) thenegotiable quantity, ii) the negotiable delivery period, and iii) thenegotiable quality.
 3. The system of claim 1, wherein a price for thespecific commodity or the specific financial instrument is determinedbased at least in part on one of the following: i) a market benchmark,and ii) a fixed price.
 4. The system of claim 1, wherein each of thefirst and second real-time, dynamic trading windows is configured toreceive input data that comprises at least one or more of the followingdata: order data, bid data, validity data, variance data, range data,timing data, conditions data, commodity quality, commodity shipmenttimes, commodity delivery points, commodity delivery dates, commodityamounts, if-then statements relating to automatic trades involvingacceptance of modified terms, conversion of contract terms, differentialpricing data, and any combination thereof.
 5. The system of claim 1,wherein at least a portion of the terms of the order data is hidden fromdisplay to the first or second customer.
 6. The system of claim 5,wherein the set of program instructions further comprises at least oneinstruction that determines which at least one of the following data ishidden: an absolute price range acceptable to the first customer or thesecond customer, an identity of who entered the at least one order; anda time that the at least one order remains valid.
 7. The system of claim1, wherein the set of program instructions further comprises at leastone auto-complete instruction which automatically populates a new orderform from the customer's previously submitted order data.
 8. The systemof claim 1, wherein the set of program instructions further comprises atleast one form instruction which automatically generates at least onedocument to complete a transaction once at least one trade match isdetermined.
 9. The system of claim 1, wherein the set of programinstructions further comprises at least one profit-and-loss instructionwhich calculates, in real-time, at least one of the following: i) thefirst and the second customers' trading positions and ii) at least onehypothetical effect of a contemplated trade.
 10. The system of claim 1,wherein the first and second real-time, dynamic trading windows arefurther configured to allow the first and second customers to provide aplurality of choices for each of the negotiable quantity, the negotiabledelivery period, and the negotiable quality, wherein each of theplurality of choices is associated with one of the following outcomes:i) a pre-determined price for the specific commodity or the specificfinancial instrument; ii) a discounted price based on the pre-determinedprice for the specific commodity or the specific financial instrument;and iii) a premium price based on the pre-determined price for thespecific commodity or the specific financial instrument.
 11. The systemof claim 10, wherein the first and second real-time, dynamic tradingwindows are further configured for ranking the plurality of choices foreach of the negotiable quantity, the negotiable delivery period, and thenegotiable quality.
 12. The system of claim 4, wherein the set ofprogram instructions further comprises at least one instruction thatautomatically performs, based at least in part on the input data, one ofthe following actions: i) enter the at least one trade order; ii) modifythe at least one trade order; and iii) cancel the at least one tradeorder.
 13. The system of claim 4, wherein the set of programinstructions further comprises at least one instruction that continuallycalculates one or more trading opportunities based at least in part upona combination of the first or second customers' position and the inputdata.
 14. The system of claim 1, wherein the exchange interface ispresented to the first and second customers on a mobile device.
 15. Thesystem of claim 1, wherein the system is configured to allow the firstand second customers to pre-select with whom the first and secondcustomers trade.
 16. The system of claim 15, wherein the first andsecond real-time, dynamic trading windows are further configured todisplay the negotiable quantity, the negotiable delivery period, and thenegotiable quality for at least one potential trade between the firstand second customers when the first and second customers select eachother as the pre-selected trading partners.
 17. The system of claim 15,wherein the first and second real-time, dynamic trading windows arefurther configured to: i) display the negotiable quantity, thenegotiable delivery period, and the negotiable quality for at least onepotential trade, and ii) prevent the direct negotiations prior tocontract formation between the first and second customers when the firstand second customers are not the pre-selected trading partners.
 18. Thesystem of claim 1, wherein the first and second real-time, dynamictrading windows are further configured to display, for a specificcommodity or a specific financial instrument, at least the following: aload rate of a shipping vessel, underlying standardized contract rules,and payment terms.
 19. The system of claim 1, wherein the exchangeinterface further comprises a calendar and at least one calculatorfunction, wherein the at least one calculator function performs one ofthe following tasks: i) remind the first and second customers ofdeadlines for completing the at least one trade; ii) calculateup-to-the-minute actual profit and losses for the at least one trade;iii) shipping costs for the at least one trade, and iv) financing costsfor the at least one trade.
 20. The system of claim 1, wherein the setof program instructions further comprises at least one instruction thattransmits data related to processing the at least one trade to at leastone electronic futures brokerage to permit clearing of the at least onetrade.
 21. The system of claim 1, wherein the exchange is a many-to-manyexchange and wherein the exchange interface is configured to allow atleast one one-to-many auction.